Wall Street analysts see more downside ahead for Tesla as latest earnings report lacks 'razzle dazzle'

Wall Street is bracing for a rocky road ahead for shares of Tesla on the heels of a messy second-quarter print. The electric vehicle giant fell short of Wall Street's earnings expectations , as its auto business came under pressure. Tesla posted adjusted earnings of 52 cents a share, versus an LSEG estimate of 62 cents. The company also reported a decline in its adjusted operating margin , as it spends on artificial intelligence and discounts its vehicles.

mountain Shares fall after earnings disappointment Shares slumped nearly 11% on Wednesday , with at least two firms — New Street and Cantor Fitzgerald — downgrading shares to neutral. "We see limited valuation upside, and limited risks of material positive revisions on that time horizon," said New Street's Pierre Ferragu. "Next inflection in the stock unlikely in the next 12 months." Tesla was riding high prior to releasing its latest quarterly figures.

mountain TSLA year to date "Until Tesla is able to begin production of new lower cost models, which the company expects in 1H25, we believe pricing/incentives could remain a key demand lever and weigh on margins," added Goldman Sachs analyst Mark Delaney as he trimmed his price target and lowered EPS estimates. Delaney has a neutral rating on the stock. Some analysts also view AI initiatives from the company as fully backed into the stock.

mountain Shares this year To be sure, some firms reiterated their support for the EV company following the report. Piper Sandler's Alexander Potter upped his price target to $300 from $205 a share, citing expectations for a faster-than-expected rollout of full self-driving capabilities. Baird's Ben Kallo also suggested that investors utilize the pullback to "buy the dip" before the company's October Robotaxi event.

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